Controlled Entities - Policy

1. Purpose and Objectives

The purpose of this policy is to outline the powers and responsibilities of Senate to form, participate in the formation of, or be a member of controlled entities as set out in The University of Queensland Act 1998.

2. Definitions, Terms, Acronyms

Act - TheUniversity of Queensland Act 1998.

Control - the capacity of the University to lead decision-making, directly or indirectly, in relation to the financial and operating policies of an entity so as to enable that entity to pursue the goals of the University.

Controlled entity - an entity that satisfies the test of control in s50AA of the Corporations Act 2001 and includes:

an entity which the University wholly owns; or

an entity in which the University holds a partnership interest or other legal or beneficial interest of any kind (including a shareholding interest or membership interest; and

the University has control of the entity.

Company - an entity formed and registered under the Corporations Act 2001 of the Commonwealth, or the corporations law of a country or state outside Australia, for economic purposes and trading as a business, whether for profit or not, and includes a company limited by guarantee, a company limited by shares, or an unlimited company.

3. Policy Scope/Coverage

This policy applies to all staff and to Senate members, where relevant to their roles and responsibilities.

4. Policy Statement

The University recognises the important contribution controlled entities can make in achieving its overall mission. This policy establishes a controlled entities governance framework that is consistent with the University’s strategic goals, governance and risk management practices, to assist Senate to discharge its responsibilities effectively in relation to controlled entities.

5. Establishing Controlled Entities

Controlled entities may be established or acquired by the University for a variety of reasons including:

to provide an appropriate governance framework for the management of specialised functions of the University;

to separate the management of non-core functions of the University from core functions;

to provide for a level of independence in the decision-making or operation of a function of the University;

to enable the University to establish a more flexible operational environment for the purpose of the management of specific functions of the University; or

to act as a holding entity for specific activities of the University.

Controlled entities operate at arm’s length from the University and may have duties and responsibilities imposed by law, in addition to any duties, functions or limitations imposed under the Act.

As decision-making bodies, controlled entitles are capable of exposing the University to increased levels of risk and liability for their decisions and activities therefore, The Senate, must take reasonable steps to ensure that controlled entities operate at all times in the best interests of the University and are accountable to the University, in addition to meeting their own stated objectives.

Where the University has approved the establishment of a controlled entity, the University must ensure that the controlled entity is accountable and operates within a system of internal controls that allows the Senate to verify and assure the appropriateness of decision making and management.

Subject to the requirements of this policy, a controlled entity will operate independently of the University and will manage its own operations in accordance with the Act, relevant laws, its constituting documents and, where applicable, any agreement with the University.

6. Roles and Responsibilities of Controlled Entities

The Senate is responsible for:

Approving the establishment or acquisition of a controlled entity;

Approving the monitoring systems of control and accountability in relation to controlled entities;

Establishing requirements regarding reporting by governing bodies of controlled entities to the Senate;

Ensuring, as far as is reasonably practicable, that the governing bodies of controlled entities:

possess the expertise and experience necessary to provide proper stewardship and control; and

comprise, where possible, at least some members who are not members of the Senate or members of staff, or students, of the University; and

adopt and evaluate their own governance principles; and

document, and keep updated, a corporate or business strategy containing achievable and measurable performance targets.

The Vice-Chancellor and President is responsible for:

recommending to Senate proposals to establish or acquire controlled entities;

appointing the Chairperson of a University controlled entity in consultation with the entity’s board of directors;

reporting to the Senate in relation to the operation of controlled entities; and

conducting assessments and recommending reviews of controlled entities to Senate if considered necessary.

7. Requirements for Controlled Entities

Controlled entities of the University must operate in accordance with high standards of corporate governance which ensure accountability and meet community expectations, as identified in this policy and procedures, the law and any other rule of the University.

The constituting documents of the controlled entity must address the following:

the objectives of the controlled entity, which shall not be inconsistent with the objectives of the University as set out in the Act;

whatever restrictions on the functions of the controlled entity as may be necessary to ensure compliance by the University with the Act or any other legislation, in relation to:

borrowing funds other than from the University;

issuing shares, or options to acquire shares, to other parties;

acting as agents of the University or making warranties or representation on behalf of the University;

committing University resources into contractual arrangements with other entities;

entering into joint ventures or partnerships;

providing loans or benefits to directors, other than directors’ fees;

incurring any debt or contingent liability;

investing any funds; and

such other matters as may be determined by the Senate.

provide for the appointment of members of the governing board by the Senate, in such proportion as may be necessary for the management of the University’s risk, such appointments to be for a period of two or three years, with reappointment subject to satisfactory performance and continuing suitability of the appointee, to be assessed by the governing board. The Vice-Chancellor and President must be consulted in relation to all appointments and reappointments.